Deal between train unions and NS will likely lead to higher fares

The deal between the train worker unions and national railway NS would almost certainly result in customers paying higher fares, several experts said after the news emerged on Sunday. Terms of the 18-month-long collective bargaining agreement will put an end to future strikes for now, with significant wage increases and bonuses that result in an average estimated raise of 9.25 percent.

“Looking at the extended forecasts, there is a good chance that the increase in train tickets as of 1 January will be higher than in other years,” a spokesperson for the NS told De Telegraaf. “The price can be increased by the maximum expected inflation rate. A decision about this will be made in the autumn.”

If union members agree to the deal, the contract would retroactively take effect on 1 July 2022, with workers getting an immediate 5 percent raise with a minimum value of 185 euros per month. They will then get a bonus of 1,000 euros in December, followed by another 3.45 percent pay hike on 1 January.

An additional 1,000 euro bonus will be disbursed in July, the FNV Spoor labor union said. On top of that, workers can see more money to correct for inflation, a minimum wage of 14 euros, the abolishment of different pay scales for younger workers, a shoring up of pensions, and an extension to the early retirement scheme.

The tentative 200-million euro deal put an end to worker strikes for the time being. The unions called five regional one-day strikes in August, one of which led to a shutdown of nearly all NS rail services. They then announced three additional wider regional one-day strikes. The first caused the stoppage of most national and international rail services for 24 hours last week, with two others initially planned for Tuesday and Thursday.

Though there is a deal on the table, it remains to be seen how the NS will pay for it. Although the company saw a profit of 78 million euros for the first half of this year, that was almost entirely due to government support. Without that aid, the firm would have suffered a 225 million euro loss.

The NS “can pass on the wage increase to the passenger, who will then spend more on a train ticket. As long as the government does not provide sufficient support or adjust the policy, we will have to get it from the employers,” said Reinier Castelein, a leader at De Unie, a labor union that is not connected to the train workers. Castelein gave an interview to De Telegraaf about the issue.

Other countries in Europe have seen government support for public transportation boosted to continue to encourage people to use the services as coronavirus restrictions disappeared. People in Germany could access trains, buses, and metros for a subscription of just 9 euros per month over the summer. Spain made free tickets available for many journeys of a short or medium distances. Luxembourg’s trams have been free since 2020, and Malta will follow with free service from 1 October.

But the Dutch government has no plans to further subsidize public transportation. The cost of just making train travel free would be about 2 billion euros. Abolishing the 9 percent VAT on train tickets would cost the Dutch government between 300 and 400 million in revenue.

Moreover, the rail operator’s turnover also fell from 1.8 billion to 1.6 billion euros. With the recovery of passenger numbers leveling off at just over 80 percent of pre-coronavirus figures, the NS is planning to operate 10 percent fewer trains in 2023 compared to 2019.

“The workers are now cheering, but the timetable has been scaled down due to the staff shortage,” said Professor Ton Wilthagen. “This means that there are fewer travelers and less income to absorb the extra wage costs, while passengers have to be won back," the Tilburg University employment law professor told De Telegraaf.